Mutual funds, quarterly figures, Q2 2009

The value of all mutual fund shares at the end of the second quarter was NOK 366.3 billion, up from NOK 313.3 billion at the end of the first quarter. This large increase in value is caused by relatively high net purchases of mutual fund shares during the period, as well as a strong increase in value of the funds' portfolios. Net purchases amounted to NOK 13.7 billion in the second quarter, while the increase in values of the funds' existing portfolios reached NOK 39.5. The increase in values of the funds’ existing portfolios can be explained by a positive development at the Oslo Stock Exchange and in foreign markets. In spite of a strong increase in the value of all mutual fund shares during this quarter, it is still far from the level of the fourth quarter of 2007 where the total value of mutual fund shares was NOK 456.3 billion.

Net purchases in all types of funds

In the second quarter of 2009, mutual fund shares were purchased in all types of funds. A whole NOK 10.4 billion of the total net purchases were placed in equity funds. The remaining net purchases were placed in bond funds and in money market funds.

Financial corporations with large share of net purchases

The financial corporations’ net purchased mutual fund shares for NOK 9.9 billion in the second quarter of 2009, and thereby stood for the largest share of the total net purchases. This sector net purchased most in equity funds, but also placed large amounts in bond funds and money market funds. Of the financial corporations, it was particularly the life insurance companies that increased their holdings in funds as well as banks and financial auxiliaries. Life insurance companies net purchased for a total of NOK 5.9 billion, of which NOK 3 billion was invested in bond funds and NOK 2.3 billion in equity funds. The life insurance companies, which net sold for large amounts in the fourth quarter of 2008 when the markets were at their most volatile, have now net purchased mutual funds for two quarters in a row.

Banks invest

The banks have net purchased mutual fund shares every quarter back to 2006, even through the financial crisis and when the markets were very volatile. In the second quarter of 2009, the banks continued to invest in mutual funds for NOK 1.5 billion, of which nearly NOK 0.5 billion was invested in equity funds and NOK 1.1 billion in money market funds.

Households continue to net purchase

Households net purchased during the second quarter of 2009 for NOK 2 billion in equity funds, but net sold in bond funds and in money market funds. This contributed to the households’ share of the total mutual fund shares amounting to NOK 1.6 billion. This is the second quarter in a row where households net purchased in funds, this after a long period where they sold for more than they purchased.

Less influence from currency volatility

The funds' holdings of stocks of foreign issuers increased by NOK 38 billion to NOK 108.9 billion from the end of the first quarter 2009 to the end of the second quarter of 2009. The currency market was relatively stable in the second quarter of 2009, and there has not been as much volatility between currencies as in the previous two quarters. This implies that the changes in the values of the funds’ portfolios are largely caused by the prices of the underlying financial instruments as well as the funds’ purchases and sales of instruments during the period.

Life insurance companies the largest owner

At the end of the quarter, life insurance companies were still the largest owners of mutual funds, with a share of 29 per cent, while the households’ owner share was 25.2 per cent. Foreign investors owned NOK 38.5 billion of the total mutual fund shares at the end of the second quarter, and thereby increased their owner share to 10.5 per cent.